Sweden

Sweden

DEVELOPMENT BROUGHT TO HALT BY LACK OF CASH

1 November 1995

Money set aside for subsidising wind plant development in Sweden has all been allocated. If a new injection of government cash is not forthcoming, all further wind plant installation will have to be postponed until 1997 when new rules for support will come into force.

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Sweden's wind rush is about to come to a grinding halt. Money set aside for subsidising wind plant development has all been allocated and there is not a penny left. If a new injection of government cash is not forthcoming, installation of wind turbines will stop for at least a year while a new support programme is put together. Over the past year an average of 1.25 MW a month has been installed in Sweden.

Applications for subsidy -- 35% of the cost of a wind plant -- are piling up at energy authority Nutek. In September it was dealing with applications for some 100 wind plant, but with only SEK 60 million left to distribute. Forty wind turbines were lucky; the remaining 60 were not. Meantime applications continue to flood in.

The funds were supposed to last until July 1996, but the remainder of the SEK 250 million was spent early last month. The efforts of many developers who have fought hard for construction licences from local and regional authorities will have been in vain if no more money is found. All further wind plant installation will have to be postponed until 1997 when new rules for support will come into force.

The Swedish wind power association is working hard to convince the government that another SEK 150 million is necessary to subsidise projects in the pipeline until July next year. Anything else would be unfair, the association argues. Projects proposed in local communities which swiftly processed applications will go ahead, while proposals for regions with slow bureaucratic processes will not receive a penny. Wind projects also create valuable work in Sweden, where unemployment is still high, argues the association.

So far, appeals to energy minister Jörgen Andersson and environment minister Anna Lind have not been successful. Wiping their hands of the problem they have passed it on to the energy commission. It will publish a final report in December, to be discussed in parliament in the spring. From there it could possibly form a government proposal for a new energy policy in the autumn. If all went well with this process, new regulations and government funding could be available from January 1997. Meantime wind developers sit and suffer.

There is one distant hope, though. Sweden's green party has presented a plan for the development of wind and solar energy that includes an immediate addition of SEK 150 million to the wind subsidy programme and another SEK 500 million to the year 2000. The Greens had an unprecedented success in the September elections to the European Parliament in Sweden, capturing 18% of the vote and passing the 10% threshold in public opinion polls -- considerably strengthening the party's position in parliament.

Political hope

Party negotiations are due to start soon on a forthcoming proposition from the government to increase economic growth. The Greens are preparing to demand SEK 150 million for wind power as a prerequisite to their support for the government. The other two parties who form Sweden's green parliamentary lobby will also lend their support to the demand. The Social Democratic government, despite its hard line now, clearly recognises this as a vital negotiating point in the forthcoming round table talks.

Last year a similar situation developed for solar water heating. The funds for state grants to solar collectors ran out a year before the support period ended. The government acquiesced to demands for more money, made by the administrating agency, in recognition of the value of new jobs. Nutek has made no such demands; even worse, last year it moved some SEK 25 million from the investment pool and over to the state's research and development programme for wind power, arguing that demand for wind subsidies was not enough for the budget to be used.